EXCHANGES OF A MORE ADVANCED NATURE
Reverse Exchange Recent Developments
The IRS issued Rev. Proc. 2000-37 (effective September 15, 2000), that provides a “safe harbor” in regard to reverse exchanges. One of the significant points in the ruling applies to time limits to reverse exchanges that are similar to those that had previously only been applied to straight exchanges.
Provisions that must be met in order to fall within the safe harbor are:
From the date of closing on the new property you have 45 days to determine and list the properties you want to sell
Also from the date of closing on the new property you have 180 days to complete the entire reverse exchange.
Call us to get more details about Reverse 1031 Exchanges.
Tenancy in Common Interests in Exchanges
In March, 2002, the IRS issued Rev. Proc. 2002-22 that provdes a procedural safe harbor for those who wish to acquire a fractional interest in a Replacement Property as a tenant-imn-common with other people who also hold such fractional interests.
The adoption of this Revenue Procedure has resulted in an explosion of exchanges into “TIC” projects, and the birth of a whole new industry, the Tenant-in-Common industry, as exemplified by the formation of the Tenant In Common Association (TICA).
If you have thoughts about possibly investing in a fractional interest in one of these projects, call Olympic Exchange Accommodators, LLC to give you some advice on what to look for in exchanging into a TIC project.
Vacation Homes
The Tax Court has recently ruled that vacation homes do not qualify under Section 1031. Read our December, 2007 newsletter for more information.
